Managing student loan debt can be a daunting task, but Credible wants to make it easier. And now it has the money to try.
The San Francisco-based startup announced yesterday (Feb. 19) that it has raised a total of $2.7 million in seed financing, according to VentureBeat. Described by founder and CEO Stephen Dash as “a Kayak for student loans,” the two-year-old Credible is a student loan marketplace where recent graduates can compare offers from multiple lenders to refinance their debt.
Once a student borrower has completed a profile on the site, lenders are able to present him or her with personalized quotes for private loans at precise rates. To aid in the decision-making process, Credible enables its users to view comparisons of numerous factors such as APR, monthly payment, fixed or variable interest rate, total repayments and estimated savings.
If a borrower decides to move forward, Credible does not involve itself any further in the process. The final steps in the transaction – things like identity and income verification, as well as document signing – are left for the borrower and the lender to complete.
Borrowers are able to use Credible at no cost, while lenders for completed loans pay a fee to the company.
According to Dash, more than 15,000 profiles have been created on Credible since it launched last March, with 12,000 coming just in the last three months. He also told VentureBeat that borrowers who refinanced through the site last year saved an average of $11,688.
Dash explained that Credible focuses on helping graduates who are refinancing of existing loans – as opposed to students who are in the process of taking on initial loans – because “this is where borrowers can save the most money by comparing lenders’ offers.”
“A graduate is typically a much more attractive lending proposition than a student,” Dash told VentureBeat, “because they have a longer credit history, usually have a job and have a university degree.”